The Role of Privatisation in Sustaining Auditor Independence: Evidence from the Developing Markets

Abdul Rahman Al Natour, Naim Salameh Al-Qadi, Rasmi Meqbel, Hala Zaidan, Hamzah Al-Mawali and Manaf Al-Okaily ()
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Abdul Rahman Al Natour: Department of Accounting, Faculty of Administrative & Financial Sciences, University of Petra, Amman 11196, Jordan
Naim Salameh Al-Qadi: Amman University College for Financial and Administrative Sciences, Al-Balqa Applied University, Salt 19117, Jordan
Rasmi Meqbel: Department of Accounting, Business School, The Hashemite University, Zarqa 13133, Jordan
Hala Zaidan: Department of Accounting, School of Business, The University of Jordan, Amman 11942, Jordan
Hamzah Al-Mawali: Department of Accounting, School of Business, The University of Jordan, Amman 11942, Jordan
Manaf Al-Okaily: Department of Accounting, School of Business, Jadara University, Irbid 21111, Jordan

Sustainability, 2023, vol. 15, issue 8, 1-17

Abstract: This paper investigates the role of structural ownership reforms in sustaining auditor independence through split-share structure reform (SSSR). Studying a sample of 1826 Chinese listed firms over the SSSR period in China, the results showed that auditor independence sustainability was less pronounced in local state-owned enterprises (LSOEs) compared with non-state-owned Enterprises (NSOEs). Nevertheless, after the SSSR, there is a significant enhancement in sustaining auditor independence. In particular, auditor independence sustainability is pronounced by providing an unqualified audit opinion, including an ‘emphasis of matter paragraph’ instead of issuing a modified audit opinion. This study contributes to the literature in two ways. First, it gives an empirical investigation into auditor independence sustainability efforts by the Chinese government through the SSSR. Second, it helps regulators and policy-makers in China and other emerging markets in evaluating the SSSR efforts to improve auditor independence.

Keywords: auditor independence; ownership structural reforms; SSSR period; LSOEs; NSOEs (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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